UK economy set for positive year-end as services see better-than-expected growth in November
The UK’s “Goldilocks” economy looks set to finish the year on the front foot after services firms picked up the pace in November, experts said.
The sector — spanning three-quarters of the economy from hotels and restaurants to accountants — grew at the fastest pace for four months, outshining a weaker November for builders and manufacturers, according to the Chartered Institute of Procurement and Supply.
Cips’ activity index — where a score over 50 signals growth — rose from 54.9 to a better than expected 55.9, despite worries from employers over the looming National Living Wage.
Chris Williamson, chief economist at survey compiler Markit, said the findings signalled 0.6% growth for the economy in the final three months of 2015, up from 0.5% growth between July and September.
He added: “The UK continues to enjoy the ‘Goldilocks’ scenario of solid economic growth and low inflation.”
The Bank of England is likely to keep an eye on potential wage inflation in the sector as it weighs the timing of the first rate rise since 2007. Capital Economics economist Ruth Miller said: “Overall, while the overall economic recovery still has some obstacles to overcome — including the renewed fiscal squeeze next year — with real wages rising and confidence still riding high, we are confident that the economy should be able to sustain this strong pace in the coming quarters.”
